Keep Money in the Family By Engaging in Smart Estate Planning
Thoughtful estate planning often includes accomplishing the objective of ensuring that your money and property actually goes where you want it to go. Quite often, that means keeping it in the family. Unfortunately, that’s not always as simple as it might sound.
Consider the scenario where one spouse passes away leaving a spouse and children. The surviving spouse may start seeing someone else or get married. In either case, the money and property is now at risk of going to that new partner or spouse. If the spouse gets married, there are marital rights that endanger your [the deceased spouse]’s assets. Further, that spouse has death rights to claim against the estate of the deceased surviving spouse.
In all these cases, there presents risks of money and property not going to your kids or other designated beneficiaries. Protect and preserving assets, ensuring wishes are honored and “keeping it in the family” is part of our toolbox.
[Read Transcript]
Hi, this is Barry Haimo. Thanks for stopping by for another dose of Bite-Size Bits of Knowledge, where we give you a meaningful amount of information in a short amount of time. In our last video, we talked about the importance of estate planning for a spouse who is financially responsible.
In this video it’s a similar theme of estate planning to alleviate and address the concern that a spouse may have of the assets ending up going to a subsequent partner or spouse of the surviving spouse.
In English, if you pass away, are you concerned that all of your precious hard-earned assets are going to benefit your spouse’s new girlfriend or boyfriend? Or your spouse’s new husband or wife? Said differently, if you’re 65 or 75 years old, it doesn’t matter what you are. You’ve accumulated hard-earned assets, and we’ll just say the wife passes away first. Is there a concern that the husband is going to fall in love and marry a 23-year-old Tahitian princess who happens to be a Miami dancer?
Is there a concern the assets are going to flow in that direction and not downward to your family? Oftentimes, the answer is yes. That is not something I want to happen. To be clear, it’s very likely that could happen for two reasons. Number one is basically the person is involved in a relationship, they’re going to benefit that person.
And number two is, if they get married, then that spouse now has the elective share rights we’ve talked about and has an inheritance right in your husband’s and your assets, the state. So you can guarantee that money is going to go this way instead of this way. The way to solve this problem is to use trust. If you don’t use a trust, you roll in the dice. Trusts are really good vehicles for controlling wealth, managing it, preserving it, protecting it, and ensuring that it goes to the right place at the right time in the right way.
Thank you for stopping by. Stay tuned. For more, give us a call. We’re delighted to work with you. Thank you, and have a good rest of the day.
Estate Planning Is Family Planning
Basic estate planning typically includes a last will and testament, one or more revocable trusts, a power of attorney, a health care surrogate and a living will. These documents prepare you for both during life and after death.
People dismiss the urgency of planning because of the morbid thought of death. What they fail to realize is that planning is about life. It’s also about planning for the end of life. More importantly, it’s about having a plan so you’re ready for whatever life brings. It’s not just about you, it’s about your family because it seriously affects their lives too.
Most people have the misconception that they don’t have an estate because they do not live in a mansion with a mile-long driveway, an adjoining guest house, and a butler. The reality is that estate planning encompasses planning for both during life and after death, and it touches arguably everyone.
It’s not just about end-of-life planning. It’s more appropriate to characterize estate planning as family planning, because families are made up of people with dynamic relationships. Every family has assets, creditors, and medical and health concerns.
What is common to all families is their desire to have a good life. What is also common is the unspoken desire to have a good end of life, and for their families to have an easy transition when they are gone.
How to Talk to Your Family Members about Their Inheritance
It probably goes without saying that family communication is important in estate planning. After you have worked through the details and executed a solid estate plan tailored to your needs and goals, it is important to have an open discussion regarding those documents with your loved ones.
There are three common ways to have meaningful conversations with family members. The first is a one-on-one private conversation. Another way is to hold a family meeting. The last is to use a family counselor. This one is particularly useful if you believe tensions could become high with this type of conversation. And, of course, you’re not limited to any one course.
Don’t Unintentionally Disinherit Your Stepchildren During Estate Planning
The modern family comes in many shapes and sizes. Many households include a mix of biological children and stepchildren from prior marriages or relationships. And when it comes to estate planning, parents of step-children are faced with unique considerations. For this reason, it’s important to understand how stepchildren inheritance law affects you.
In Florida, step-children are not treated as their step-parent’s legal heirs. So you should ensure your will or trust defines the names your children correctly if you want them to inherit from your estate. Otherwise, you risk unintentionally disinheriting your child, leaving him or her with nothing. This was the predicament the Rodriguez family was surprised to find itself in.
The Importance of Planning Ahead
Other families aren’t so lucky. Without a proper estate plan, parents often end up disinheriting children or stepchildren accidentally. As a result, they leave them without a single penny of inheritance or financial security.
Parents who wish to leave an inheritance behind for stepchildren must create a strong, thoughtful estate plan. You can make sure your stepchild will inherit from your estate by naming him or her specifically as a beneficiary in your will. Your stepchild may not be included if you refer to him or her using vague terms such as “descendants,” “children,” or “heirs.”
On the other hand, you have to be careful when defining heirs so as to avoid excluding an otherwise qualifying class of beneficiaries.
Bottom line? When you protect your family, assets and business, you gain the peace of mind of knowing you’re prepared and in control. You may feel apprehensive about estate planning, but it doesn’t have to be this way. We’ll help you achieve your estate planning goals and ensure you feel accomplished and confident.
